PURPOSE: The purpose of this study is to evaluate the safety and efficacy of pimagedine, as compared to placebo, in patients with type II diabetes and overt diabetic nephropathy. Chronic hyperglycemia in patients with type II diabetes can lead to a variety of complications including nephropathy and retinopathy. One of the major pathophysiological mechanisms by which hyperglycemia may lead to characteristic irreversible tissue damage is the formation of glucose-derived cross links in proteins (advanced glycated endproducts [AGE's]) that result in increased stiffness, abnormal protein accumulation, membrane leakiness and dysfunction. Patients with diabetes have been shown to have higher levels of serum AGE's than non-diabetic subjects, and the AGE levels are proportional to the severity of diabetic nephropathy. Also, reactive intermediates formed during periods of hyperglycemia may continue to cross-link with proteins even after blood glucose is lowered. Therefore, normalization of blood glucose may not completely prevent the progression of complications. METHODS: This is a phase III, double-blind, randomized, placebo-controlled study which will evaluate 900 patients at 70 sites in North America. Patients will be randomized to either a placebo or one of two dose levels of pimagedine. However, the dosage of pimagedine may be changed during the course of the study, based on creatinine clearance rates. Each patient is evaluated at several month intervals for blood pressure, Hemoglobin A1c, kidney function, and general chemistry and hematology profiles. Patients have a Glomerular Filtration Rate test at 3 month intervals and a dilated eye examination yearly.